Page:Harvard Law Review Volume 32.djvu/806

770 770 HARVARD LAW REVIEW purchaser to equities. It is, however, evidence of notice.^^ Pay- ment of a price large enough to include the defaulted installment would also be evidence. Therefore, known default, regardless of the holder's option, is enough to render an installment instrument completely overdue for purposes of equitable defenses and charging indorsers, though not for tender of payment and the Statute of Limitations. The reason is, that the default is at a maturity, for the instrument has several maturities. The earher maturity does not result from acceleration; it is already there, specified by the language of the instrument. This distinguishes the installment type of acceleration provision from all the others considered in this article. The same principle applies to a series of notes which show on their face that they are part of the same transaction,^^ but not to instnunents which are accelerated by default of interest.^ Failure to pay interest is as likely to result from temporary embarrassment as from an equitable defense; it does not entitle indorsers to notice; and therefore it is not equivalent to a dishonor for purposes of letting in equities.^ It is hardly necessary to state that a holder without notice of either default or exercise of the option is not affected by the accel- eration provision. ^^ Acceleration by an Extrinsic Fact Another type of acceleration clause provides for payment at a stated day or sooner upon the happening of an event entirely dis- tinct from the collection of the instrument. Examples are: "ninety days after sight, or when realized"; ^^ "in twelve months, or before 81 National Bank of North America v. Kirby, io8 Mass. 497 (1871); Taylor v. Ameri- can National Bank, 63 Fla. 631, 649, 57 So. 678 (1912); McCorkle v. MiUer, 64 Mo. App. 153 (1895); Gillette v. Hodge, 170 Fed. 313 (C. C. A. 8th, 1909). ^ 25 Hakv. L. Rev. 286 collects the cases. The principle is the same whether the acceleration provision is present or not. 83 Gillette v. Hodge, 170 Fed. 313 (C. C. A. 8th, 1909). " Cromwell v. Sac Comity, 96 U. S. 51 (1877); the authorities are collected in 8 Cor- PTTS Juris, 478, which cites a few cases contra. ^ Lowenstein v. Phelan, 17 Neb. 429, 431, 22 N. W. 561 (1885); Core v. Smith, 23 Okla. 909, 924, 102 Pac. 114 (1909), sevible; Gillette v. Hodge, 170 Fed. 313 (C. C. A. 8th, 1909).
 * • Held bad in Alexander v. Thomas, 16 Q. B. 333 (1851).